Superstorm Sandy homeowners unhappy with insurance payouts get more time to appeal

Sandy survivors still battling over their flood insurance claims will now have more time to appeal their settlements.

In a bulletin issued yesterday FEMA announced it will extend for another six months the period for Sandy-impacted homeowners to file Proof of Loss forms, which are the first step in appealing a flood insurance settlement. The window after previous natural disasters has never been longer than a year, so this extension is an unprecedented move. It comes after pressure from lawmakers on both sides of the aisle.

Late last week, nearly two dozen Senators and members of Congress from New York and New Jersey — including Senators Robert Menendez and Jeff Chiesa and Representatives Jon Runyan, Frank LoBiondo, Rob Andrews, Bill Pascrell and Rodney Frelinghuysen — signed on to a letter to FEMA Administrator Craig Fugate. In it, they argued that many of their constituents have been mired in bureaucratic red tape and are only just starting the recovery process, so they need more time to complete the paperwork.

“While we are aware that FEMA has the authority to approve on a case-by-case basis claims submitted after the one-year deadline,” the letter stated, “we believe that a blanket extension for every homeowner should be in place to ensure a fair and proper process for everyone. To deny these claims based purely on the timing of their paperwork pulls the rug out from underneath homeowners who are relying on their flood insurance policies to repair and rebuild their homes.”

According to FEMA – which runs the National Flood Insurance Program — 99 percent of all Sandy-related claims are now closed.

But the private insurance companies that manage the policies typically consider cases “closed” after they’ve issued their payouts, even though policyholders often continue to file appeals. Indeed, a recent NJ Spotlight survey of people’s experiences dealing with their flood insurance companies has so far yielded dozens of negative responses, with complaints ranging from lost paperwork to adjuster errors to insurance companies claiming that damage pre-existed the storm. While the results of the survey are in no way scientific, they offer compelling anecdotal evidence that even a year after Sandy, many problems persist.

New Jersey lawmakers contacted yesterday by NJ Spotlight applauded FEMA’s move, with Senator Chiesa calling it a “commonsense extension” that will “help New Jerseyans still struggling with the lengthy process of rebuilding.”

Senator Menendez issued a statement that he was pleased with the decision. “This will give the victims hit the hardest by the storm enough time to provide the necessary documentation to prove their claim and get the money they’re entitled to,” he wrote.

And Congressman Pascrell noted that “Many homeowners that were devastated by Sandy were only made aware of additional expenses once the rebuilding process started. This extension will provide families with the additional time needed to ensure a fair process in filing their flood insurance claims and receiving the full benefits they are entitled to,” he said.

The memorandum applies to Sandy-impacted homeowners in all the affected states who suffered losses between October 25th and November 6th, 2012. FEMA is now giving them until the end of April and says it will monitor claim activity to determine whether further extensions may be warranted.

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Scott Gurian is the Sandy Recovery Writer for NJ Spotlight, an independent online news service on issues critical to New Jersey, that makes its in-depth reporting available to NewsWorks.